ECONOMIC STIMULUS-II PACKAGE

Prelims Syllabus :Growth, Development, National Mains Syllabus :GS-III Effects of liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.

Context:

The Union Finance Minister has recently announced the short term and long-term measures for supporting the poor, including migrants, farmers, tiny businesses and street vendors as part of the second tranche of Atmanirbhar Bharat Abhiyan.

About Free Food Grains:

The allocation of additional food grain to all the States/UTs (5 kg per migrant labourer and 1 kg chana per family per month) for two months (May and June, 2020) free of cost. It is an extension of the Pradhan Mantri Gharib Kalyan Yojana.

The Migrant labourers not covered under National Food Security Act (NFSA), 2013 or without a ration card in the State/UT in which they are stranded at present.

The entire outlay of ₹3500 crores will be borne by the Government of India.

About One Nation One Ration Card:

It is part of Technology Driven System Reforms and will enable migrant workers and their family members to access PDS benefits from any Fair Price Shop in the country.

Around 67 crore beneficiaries covering 83% of Public Distribution System (PDS) population will be covered by National portability of Ration cards by August, 2020 and 100% National portability will be achieved by March, 2021.It will ensure that the people in transit, especially migrant workers can also get the PDS benefit across the country.

About Scheme for Affordable Rental Housing Complexes:

It will be launched soon and under this, the Central Government will provide ease of living at affordable rent for Migrant Workers and Urban Poor.

It will be converted into Affordable Rental Housing Complexes (ARHC) of government funded houses in the cities under PPP mode (Public Private Partnerships) through Concessionaires.

About Credit Linked Subsidy Scheme:

This Scheme for Middle Income Group (MIG, annual income between ₹6 and ₹18 lakhs) will be extended up to March 2021. It comes under the Pradhan Mantri Awas Yojana (Urban).

It will benefit 2.5 lakhs middle income families during 2020-21 and will lead to investment of over ₹70,000 crores in housing sector.

It will create a significant number of jobs by giving a boost to the Housing sector and will stimulate demand for steel, cement, transport and other construction materials.

Credit Boost for Kisan Credit Card Scheme:

It is a special drive to provide concessional credit to Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) beneficiaries through Kisan Credit Cards.

It will inject additional liquidity of ₹2 lakh crore in the farm sector.

The 2.5 crore farmers will be covered and fisherman and animal husbandry farmers will also be included in this drive.

Shishu MUDRA loanees and their Interest Subvention:

The Government will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below ₹50,000.

The current, MUDRA Shishu loans is around ₹62 Lakh crore. This will provide relief of about ₹1,500 crore to Shishu MUDRA loanees.

Street Vendors and Credit Facility:

It will be launched to facilitate easy access to credit to Street vendors and enable them to restart their businesses.

It is expected that 50 lakh street vendors will be benefited under this scheme and credit of ₹5,000 crores would be provided.

The Bank credit facilities for initial working capital up to ₹10,000 for each enterprise will be extended.

About Employment using CAMPA Funds:

Around ₹6,000 crore of funds under Compensatory Afforestation Management & Planning Authority (CAMPA) will be used.

Additional Emergency Working Capital:

It is over and above ₹90,000 crore that will be provided by NABARD to this sector in the normal course.

It will benefit around 3 crore farmers, mostly small and marginal and will meet their post-harvest Rabi and current Kharif requirements.

Demerits:

The Economists feel, that this intervention was too little, too late, and that the free food grains provision should have been universalised to deal with widespread distress.

They have asked the government for a one-time cash transfer to vulnerable sections like migrant labourers.

Around 50 crore people in the country without ration cards, of which 10 crores are legally entitled to PDS grain under NFSA.

There are many people who were managing in normal times, vegetable vendors, gig economy workers, auto rickshaw drivers, who are in dire straits now. PDS needed to be extended to all these people at this time.

There were no steps taken to extend MGNREGA employment guarantee to at least 200 days. It aims to provide at least 100 days of wage employment.